Panel blames lack of low-cost housing on red tape

WASHINGTON -- Red tape and restrictive zoning have put the American dream of a house in the suburbs out of reach of millions of families, a presidential panel reported yesterday.

Not only are the working poor economically excluded, but many suburban communities "end up as homogeneous enclaves where households such as schoolteachers, firefighters, young families and the elderly on fixed incomes are all regulated out," the report said.

The report blamed excessive local regulations for adding up to 35 percent to the price of a new house. It said zoning laws requiring large lot sizes and architectural conformity are also being used to keep moderate-priced houses and multi-family dwellings from being built in many suburbs.

"In theory a way of separating 'incompatible' land uses to protect health and safety, zoning has become a device for screening new development to ensure that it does not depress community property values," the report warned.

Likewise, in inner-city neighborhoods, "excessive and unnecessary government regulation" have pushed housing costs "often higher than they should and could be," said the report by the federal Advisory Commission on Regulatory Barriers to Affordable Housing.

"In community after community across the country, local governments employ zoning and subdivision ordinances, building codes, and permitting procedures to prevent development of affordable housing," the report said. "They fear that affordable housing will result in lower land values, more congested streets and a rising need for new infrastructure such as schools."

The commission said excessive regulation can add 25 percent to 35 percent to the cost of a new house.

"Land developers in central Florida, a boom area under intense development pressure, must add a $15,000 surcharge to the price of a $55,000 house to cover the cost of excessive regulation," the report charged. "A $55,000 house becomes a $70,000 house."

The commission presented its report to President Bush and Jack F. Kemp, secretary of the Department of Housing and Urban Development. It called for federal pressure on state and local governments to tear down the regulatory barriers that have shored up housing prices.

"If we want to have affordable housing for all, and that's certainly our objective and goal, we've got to confront this problem of regulation and excessive red tape," said Mr. Bush. "These are obstacles that make it difficult to construct housing for low-income families."

The commission offered 31 major recommendations for cutting red tape and housing costs. They ranged from setting an example by removing or relaxing federal housing regulations to easing the requirement that contractors pay prevailing local wages to workers building federal housing projects.

The commission urged Congress to amend the National Affordable Housing Act of 1990 to authorize HUD to link federal housing funds to how fast and thoroughly states and localities remove their regulatory barriers.

At a press conference later, Mr. Kemp said HUD was seeking to make home ownership available to low-income families nationwide. He said grants similar to the Nehemiah project in Baltimore, which is building and renovating housing for eligible families, could eventually be used around the country if Congress agrees to provide federal funds under HUD's Home Block Grant Project.

Under a 1987 law, the Nehemiah project provides federal funds to non-profit organizations, which then use the money for low-income housing projects.

In Baltimore, the funds are being used to construct 300 town houses in Penn-North and Sandtown-Winchester.